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Why Do Entrepreneurs Innovate Better Than Managers?

samzenpus posted about 2 years ago | from the coffee-is-for-innovators! dept.

Businesses 134

netbuzz writes "New research from MIT suggests that entrepreneurs innovate better than managers not because they try more often but rather because when they do try they apply more of their available brainpower to the task. 'We found, somewhat surprisingly, that managers and entrepreneurs did not differ in the probability with which they would undertake explorative (potentially innovative) courses of action. But when entrepreneurs did select explorative tasks, they used both the left and right sides of the frontal cortex of their brain whereas managers only used their left parts of the frontal cortex,' says the lead researcher, MIT Sloan School of Management Visiting Prof. Maurizio Zollo. This is an important difference, he notes, 'because the right side of the frontal cortex is associated with creative thinking, involving to a larger extent emotional processes, whereas the left side is associated with rational decision-making and logic.'"

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coz they get more excited? (5, Insightful)

Anonymous Coward | about 2 years ago | (#42575159)

coz they get more excited?

It's often easier to get funding or buy-in if you're genuinely excited about something rather than thinking dispassionately "this is a good thing technically".

Re:coz they get more excited? (4, Insightful)

click2005 (921437) | about 2 years ago | (#42575357)

Managers will look at how much money it'll make and very little else but entrepreneurs will try something because it seems like a good idea.
The profit/loss for a manager will be a few percent (depending on the market & hollywood accounting) but the entrepreneur will make or lose
a lot more. Most people seem to forget that for every successful entrepreneur out there you'll find 10 who failed or got stepped on by someone else.

Re:coz they get more excited? (5, Interesting)

Anonymous Coward | about 2 years ago | (#42575479)

As a former senior manager in a Fortune 50 company, and now a co-founder with my own Series A funded startup, I might share a unique vantage:

When I was a manager in corporate America, I spent a lot of time weighing the paramaters that came with the job. Often times, I wasn't actually trying to make the 'best decision' in the sense of perfection, but the right decision that fit my company, culture and current political situation as a manager. How might my boss respond to this? How will it be perceived more broadly? What will it do for my personal and team credibility? Do ideas like this one seem to survice in this culture? I probably put as much thought into puzzling through these things as I did trying to 'innovate'. (Oddly, one team I managed was called Innovation Development. But thats another story).

As a entrepreneur the team is really small. And the parameters are only a few. Really I only have to answer to my co-founder and our investors. And the overall set of paramaters personalities I'm managing against are substantially fewer (and probably of my own choosing) and more 'real' than in corporate america. What people think, or what my boss / team might think, are really non issues now.

As an entrepreneur, I spend a lot more time thinking bout how to realize the right idea than defending it.

Re:coz they get more excited? (0)

Anonymous Coward | about 2 years ago | (#42575631)

I think the most important is why are you doing it for.
If you are an Entrepreneur and you use all your creativity and your gut to do something you have two options:
1) Grow your company and win a lot of money.
2) Lose your company and your money.
If you are a manager you have two options:
1) Live another day in the job.
2) Lose your job.
Of course risking your job does not seem so interesting when the best you will get is a bonus and the people that will benefit are only the stake holders if you do it good, and even if you do it good, as the previous comment said, it might be ill perceived. You don't have that problem as an entrepreneur, you either win money or lose money, you don't get a bad look from your colleagues if you win money just because that's not the way the company wishes things are.

Actually, it's because (2, Informative)

AliasMarlowe (1042386) | about 2 years ago | (#42575975)

Entrpreneurs have a corpus callosum [] , which enables both hemispheres to communicate, and even to cooperate in problem solving. Presence of a corpus callosum (even in vestigial form) precludes a successful career in management. Presence of an anterior commisure [] does not prevent one from rising to middle management, as it is not involved in higher thought, but may prevent entry to the executive levels.

Re:coz they get more excited? (0)

Anonymous Coward | about 2 years ago | (#42576135)

Then as a manager you must have sucked in every possible sense. Part of the responsibility of being a manager is telling your boss when they are stupid. Sorry but there is no other way to tell management that their "corporate culture" is the problem with the organization. I tired being an employee after years of consulting work and without exception every employer created a hostile workplace for the employees.

CAPTCHA: decency --- how appropriate given the topic

Re:coz they get more excited? (3, Interesting)

gtall (79522) | about 2 years ago | (#42576651)

Try this game, presume lightning has struck and now you are a manager. You try to do the right thing, manage your people properly. Some smart aleck that you manage comes up to you one day and proceeds to tell you that you are stupid because you did A and he thought you should do B. You had good reasons for doing A, but no, now you are stupid. Others you manage do not tell you that you are stupid. Do you (1) take to heart this odd man's opinion, or (2) tell him to STFU knowing trying to explain your reasons will fall on deaf ears because he already considers you stupid?

Managers can indeed be stupid, but no one will change their actions because they are told they are stupid. They simply circle the wagons and repeat to themselves all the reasons why they do what they do thereby reinforcing their current behavior. You want to change something, explain a better way.

Re:coz they get more excited? (3, Insightful)

Nanosapien (1928644) | about 2 years ago | (#42577381)

I vote for option 3: Converse with the employee and explain your reasoning for doing A, ask him his reasoning for doing B (if he didn't explain it when he approached you), discuss both options, and end with the fact that the decision has already been made and keep an open mind in the future. Whether you're managing a few people or many, a manager ought to be open to discussion with employees, to accept constructive criticism, and be able to explain reasoning behind decisions that they make. This is good management. Sadly, not all managers are good managers.

Re:coz they get more excited? (1, Redundant)

beh (4759) | about 2 years ago | (#42576313)

Good points, anonymous coward... :-)

There may be a second point - it seems the study may see it the wrong way around: I'm not a manager, but I do have ideas on how we can improve things at various employers; I guess many, probably even most, people have ideas on how to improve a business - or a new idea for some other business. But not everyone feels they have the business acumen to become entrepreneurs.

Don't you think that having ideas comes first? How many people go out to become entrepreneurs without _any_ clue what they want to do?

The second point is also cultural - as a manager within a company you have some power in shaping your team and the culture within your team. But that's only true if the team starts with you. If you 'inherit' a team, you first need to ensure you get the culture you want - otherwise, like anon coward wrote, you have more time to spend 'defending' your ideas (and why they should take away time from your normal work), rather than being free to shape everything - as far as your budget constraints allow.

Re:coz they get more excited? (0)

Anonymous Coward | about 2 years ago | (#42576561)

This is called the "logic of appropriateness."

Re:coz they get more excited? (1)

c0lo (1497653) | about 2 years ago | (#42575365)

coz they get more excited?

The scientific explanation is:
1. the entrepreneurs used both the left and right sides of the frontal cortex (with the right side of the frontal cortex acting... indeed... to emotionally excite them)
2. the managers used both the left side of the frontal cortex and the bottom part of their body (with the bottom part of their body giving a s#17 about all)

Re:coz they get more excited? (0, Troll)

JimCanuck (2474366) | about 2 years ago | (#42575823)

No, just Managers put reality into the mix and don't waste their money.

The fact is, most entrepreneurs completely fail, their innovations are useless due to tiny market shares, tiny profit margins, and high costs.

So who cares if they innovate if their innovations are useless.

You An MBA ? (2)

Anonymous Coward | about 2 years ago | (#42575985)

If all people thought like you, we would have managers managing the caves and trees we lived on. But hell, most of population are dumb fucks who believe in the religion of money, so they grow their "leaders" from that pool of ignorance.

Obvious (4, Insightful)

egcagrac0 (1410377) | about 2 years ago | (#42575165)

Most managers are tasked with creating stability and predictability.

Most entrepreneurs have no such commission - the goal is to make money. It's easier to take risks in that pursuit.

Re:Obvious (1)

Anonymous Coward | about 2 years ago | (#42575211)

More than just that, most managers can afford to fail. A company can absorb failed projects. An entrepreneur can fail, but risks losing friends, family, and food in the process. That's a huge incentive to be creative and fully engage one's mental capabilities.

Re:Obvious (4, Insightful)

captaindomon (870655) | about 2 years ago | (#42575227)

Entrepreneurs have also put in a lot more personal capital. If the manager fails, even if he loses his job, he gets a new job. If the entrepreneur fails, he loses his life savings often.

Re:Obvious (0)

Anonymous Coward | about 2 years ago | (#42575355)

>. If the entrepreneur fails, he loses his life savings often.

Not the smart entrepreneur. For them, it's the investors and staff who lose out.

Re:Obvious (2)

Billly Gates (198444) | about 2 years ago | (#42575465)

>. If the entrepreneur fails, he loses his life savings often.

Not the smart entrepreneur. For them, it's the investors and staff who lose out.

Only true if you have already made it. Ever watch Shark Tank?

Unless you have those sales and growth and are making money hands over fist and just need some extra capital to meet existing orders an investor wont even talk to you. The risk has to be 0 and money back guaranteed or very close to this.

True back in 1999 that wasn't the case. But in 2013 it sure as hell is. You need all of your own capital or partners. Banks today wont just give out money either. They demand a personal guarantee aka colateral (as in the repo man shows up to take your car and home if you do not pay your bills each month!) No colateral? No money.

You need to already be rich to make it big or be making the sales necessary to show other investors and pay off the bank beforehand. Maybe as the economy improves this will change but right now it is where it should be. TOUGH

Re:Obvious (4, Informative)

Anonymous Coward | about 2 years ago | (#42575523)

As an entrepreneur who just finished raising a series a, I half agree with you.

It does take money to be an entrepreneur especially if you aren't getting paid. You need cash to live while you build the company and even extra cash incase it all fails and you need to get another job.

But it does not require one to be rich. Whats actually most important is access to people with money. In the form of professional acquaintances or friends. Be it personal wealth or corporate wealth.

People with money actually have a very series problem they are always trying to solve. How do I make more money with the money I have? Or at a minimum, keep the money I have safe.

Entrepreneurs offer people with money answers to both of these problems. A million dollars isn't going to 10x on its own in 12 months, but if my company works it does. That an entrepreneurs offer people with money something to be part of. Most of the high net-worth people investing in our company are excited to have something new to do. The money is just a technicality, they want to be part of seeing our idea succeed. They want to be that person that says, "ohh ___ company, ya I invested in them early on. It was clear they were going to win".

Re:Obvious (1, Informative)

jockm (233372) | about 2 years ago | (#42575811)

The investors (angels, VC, and institutional) I know — and I have known a few both down in Silicon Valley and up here in the Pacific Northwest — won't invest unless the entrepreneur is all in. As one of them said to me once "I a mortgage isn't on the line, they aren't worth investing in".

As to the main question Entrepreneurs take more risks, experiment with more wild and oddball ideas, and work well without a lot of structure. Which is also why most entrepreneurs make horrible managers. Once a startup passes a certain size the traits that were needed to get started become counterproductive to running and (more importantly) growing the company.

Some entrepreneurs can make the transition, but most can't. They tend to move on and start their next thing.

A hypocritical requirement (4, Insightful)

mbkennel (97636) | about 2 years ago | (#42576755)

Are the investors, themselves, "All In"? Do they put all their money for a fund plus their own house in one investment? Obviously not, they know that most startups fail.

Making the entrepreneur "more motivated" such that his life is nearly permanently ruined by a highly probable failure and unable to try again ever (if you are a normal person who now owes a judgement for $350,000 with no collateral and you haven't had a steady job for years and are likely to continue to be unemployed for at least a year, your life sucks and you will be divorced upon) does not not improve the odds of the outcome. More effort frequently does not translate into more success past a certain point. There is a large contribution of luck which cannot be managed or innovated around.

Do investors want to select for delusional entrepreneurs without a sense of the realities of the world?

Re:A hypocritical requirement (4, Interesting)

timeOday (582209) | about 2 years ago | (#42577515)

Do investors want to select for delusional entrepreneurs without a sense of the realities of the world?

The lottery mentality runs very deep in American culture. This is not just my opinion: More than half of those aged 18 to 29 (54 percent), believe they will get rich. [] And yet, only 2% of the population identifies themselves as actually rich. That is a BIG disconnect. Put another way, there's a sucker born every minute.

Come On (0)

Anonymous Coward | about 2 years ago | (#42576095)

You must be a corporate drone, complete with morgage, kids, iphone and a gas guzzler.

I once developed a language and compiler for two years and lived on a shoestring. I used my saved money, I had no kids and no GF. The compiler and the language spec got done, but I found out selling is much harder than inventing.

So, in the first part of adulthood everybody can be an entrepreneur. It requires discipline and the ability to save.

Here is my project:

I also did a text chat system for mobile phones (J2ME based) earlier and found that you can actually be TOO EARLY as an inventor. People were scared to hell then about the cost of very narrowband internet communications.

I do think it will be similar with Sappeur - at some point there will be a major memory-safe language without a VM and GC. Most Software Engineers are actually very, very far from being enlightened. They know their language and defend it against any argument to the last drop of blood. I guess they don't want to spend time to learn all the intricacies and absurdities of a new compiler. Which I can understand to a certain degree

Re:Come On (1)

mbkennel (97636) | about 2 years ago | (#42576775)

| I do think it will be similar with Sappeur - at some point there will be a major memory-safe language without a VM and GC.

How about Fortran?
Compile with run-time array checks on (which can often be abstracted outside loops thanks to Fortran's strict semantics and minimal use of unconstrained pointers).

| Most Software Engineers are actually very, very far from being enlightened.

Or there are more constraints practically than commonly appreciated. Do you want to propose a complete alternative to HTML and HTTP and get everybody on the planet to use it? Good luck with that.

Re:Obvious (5, Interesting)

GodBlessTexas (737029) | about 2 years ago | (#42575225)

I would also state that in the vast majority of companies, managers are trained not to take risks. I work for a multibillion dollar company where the most common management decision at the mid-management level is simply to do nothing. By not making a decision, they believe they minimize the risk of making the wrong decision, never mind that doing nothing is rarely the right decision. It also means that most management decisions then come from the very top down, which means there's no innovation from the bottom, nor is there any real quality feedback loop since suggestions for improvement never make it up the chain of command. Of course, we're a health insurance company that wastes our members money on high administrative costs, but as long as we don't lose a substantial amount of members (and won't because the individual members don't decide who their company uses for insurance) we have no reason to change. We simply keep raising our rates. It's a very dirty business, and horribly run.

Re:Obvious (3, Interesting)

obarel (670863) | about 2 years ago | (#42575469)

It's easier to answer "why didn't you do <the right thing>?" than "why did you do <the wrong thing>?". In most cases, "we didn't have enough information at the time" is good enough for the former, whereas it takes a lot more effort to explain the latter.

An entrepreneur only has to answer "where's my money?" (if s/he's playing with someone else's money), but doesn't have to justify each and every decision.

Re:Obvious (2)

JaredOfEuropa (526365) | about 2 years ago | (#42575703)

Interesting observation. Also note that if you are a successful entrepreneur, the wrong thing can easily become the right thing. Watch one guy do well and get rich, then watch a bunch of other managers emulate his ideas, decisions and even mannerisms, which often are at best irrelevant and at worst counterproductive. Look closely and it turns out many successful entrepreneurs weren't all that clever or business savvy, they had luck and/or had the guts to seize a passing opportunity.

Re:Obvious (1)

filthpickle (1199927) | about 2 years ago | (#42575625)

I work for a clearinghouse. I always enjoy giving anyone new that came from a payer a hard time. Along the lines of "Why in the world would you leave a payer to go to a clearinghouse? Now you have to figure out why the claims aren't being paid".

Re:Obvious (1)

JaredOfEuropa (526365) | about 2 years ago | (#42575659)

You're lucky if you get innovation from the top in that situation. Innovation requires a bit of culture shift in the company, and even senior execs have a hard time getting that kind of change past middle management. Sergei Brin complained about this problem in Google of all companies, and I recently heard an exec VP in a large multinational vent his frustration about the same thing. There's a good reason why companies set up skunk work type incubators.

Re:Obvious (2)

IICV (652597) | about 2 years ago | (#42577609)

By not making a decision, they believe they minimize the risk of making the wrong decision, never mind that doing nothing is rarely the right decision.

Choosing to do nothing is always the right decision when you are trying to minimize personal responsibility for failures. If you choose to do nothing, then nobody can blame you for anything besides inaction; on the other hand, if you choose to do something and it doesn't work out, then anyone who wants to take you out has concrete ammunition.

Mod up, and close thread (0)

Anonymous Coward | about 2 years ago | (#42575285)

That's a completely satisfactory answer to TFH and TFS, and no further discussion is necessary.

Re:Obvious (0)

Anonymous Coward | about 2 years ago | (#42575491)

Far more than that. It is a completely different set of rules one has to follow.

An entrepreneur has to be able to convince others that they have something cool, show that their innovation is worth people's time and money to fund/work for/purchase.

A businessperson needs a lot of skills to be able to even get people to turn their heads. Diplomacy, inventiveness, the ability to keep pressing on until sales come in or a VC cracks a deal.

A manager ultimate aim past anything, is to keep his or her job. That's it. They don't have to worry about how underlings or other people feel about them, because other than a tremendous failure, the management above will not see any of that.

A manager needs just one skill: The ability to lie if needed. Something happen, fire an underling and blame it on them, problem solved. A successful (and I'm defining success as in continuing to have a badge that works in the morning which is in reality the only thing that matters in that field) manager does not need to give a shit about what goes on under them, provided that there is enough insulation from that and the managers above. If they can keep higher ups happy, that is all that matters.

And this is universal. In the Service, replace managers with officers, and you see the same thing.

Re:Obvious (1)

91degrees (207121) | about 2 years ago | (#42575633)

That's obvious, and perfectly reasonable, but that doesn't actually make it true.

Seems that even if the manager was tasked with making money and offer the same risk and rewards, the mindset that goes into management would do a poorer job of it.

Some Of Us Have Known This For Years (5, Insightful)

smpoole7 (1467717) | about 2 years ago | (#42575183)

The entrepreneur starts the business, makes it successful, then brings in a PHB to watch the money and keep it running. This has been the case for as long as there have been businesses.

Entrepreneurs tend to be creative, driven, and willing to work around the clock. They also tend to be terrible at the "boring" things (like money management). They're often terrible at details, too.

This same basic principle works for established businesses, too. I worked with a company that turned around radio stations many years ago. We'd send in a "hit" team to do the makeover, then put in a PHB to run it after it was successful. Likewise with restaurants: when a new eatery opens, they send in the "A" team to make sure everything is perfect. A few months later, if the restaurant takes off, they send in a "detail" guy to keep it running and making money.

I wouldn't have thought that it'd take a study to discover something this obvious, but it's nice to see it confirmed scientifically. :)

Re:Some Of Us Have Known This For Years (3, Insightful)

Anonymous Coward | about 2 years ago | (#42575421)

The entrepreneur is an explorer, while the manager is a general tasked to occupy a piece of land.

Re:Some Of Us Have Known This For Years (3, Interesting)

fermion (181285) | about 2 years ago | (#42576825)

Yes, some of use have known for years that selective sampling will lead to incorrect conclusions. For instance, we tend to hear about the entrepreneurs who are successful, and the top managers who fail.

Think about what is new. Not when a dog bytes a person, but when a person bytes a dog. A manager has been vetted, so this person has a bunch of failures and succeses behind, presumably with more succeses, so the failures are news. However, an entrepreneur likely has no track record, or failures, so success is news. For instance we have a local retailer who has a successful business. Prior to this, however, he had a string of failure. Even late in his career he took chances which failed.

The point here is that in any pursuit, failing is not problem if you know how to fail, and your are resilient enough not give up and try again. The damage occurs when one believes that failure is not necessary in the process, or that certain people are more prone to failure than others. This is what leads to people just giving up. Which is what to a lot of entrepreneurs, while managers will persevere. And build up failures. Which is ok.

Your own risk and desire to succeed (1)

udachny (2454394) | about 2 years ago | (#42575189)

If you are responsible for your own success, you are taking risk with your savings, your own assets and time are on the line you will do as much as possible to succeed. If you fail it's your ass, when you fail as a manager you are only risking the current employment but if you fail in your own business you risk much more. You are invested in your own business and it's not only money and time, it's your self-esteem as well. Many people try to start businesses, but to have a higher chance of success you also should be good at what you are doing, so it's likely you are also very much emotionally invested, this forces you to push harder.

The important thing to realize though is that most businesses fail and so even if you fail you shouldn't give up, you should do whatever you can to try again.

But risking years of savings and years of life to attempt your own business will give you much more incentive to be creative trying to survive in business than if it's just another job.

Re:Your own risk and desire to succeed (0)

Anonymous Coward | about 2 years ago | (#42575497)

Your tag would suggest that I shouldn't have modded your comment interesting. But it was, so I did.

I too have posted a controversial comment and had it modded insightful and troll in equal numbers. Is there a better forum system than the /. one? Is meta-moderating just too onerous?

Re:Your own risk and desire to succeed (0)

Anonymous Coward | about 2 years ago | (#42575837)

roman_mir is a dogmatist with a slavish devotion to constant appraisal of the very powerful and wealthy (beneath a thin veil of "smash the state, but not too much"), and his rants are well deserving of being modded down. The same goes for his sock puppet accounts.

A business professor presumes neurology expertise? (1)

dorpus (636554) | about 2 years ago | (#42575217)

So an accountant hand-picked a dozen "entrepreneurs", and decided that the squiggly MRI images are better than the other hand-picked "managers"?

Re:A business professor presumes neurology experti (1)

joocemann (1273720) | about 2 years ago | (#42575737)

You probably didn't read the article... You should be an informed skeptic, not an ignorant skeptic. Being skeptical and ignorant is silly.

Re:A business professor presumes neurology experti (1)

dorpus (636554) | about 2 years ago | (#42576415)

Yes, the original article was written by 4 authors, 3 of which were business professors (including the lead author). This represents "interdisciplinary" New Age research at its worst.

Simple (0)

Anonymous Coward | about 2 years ago | (#42575221)

Entrepreneurs work to meet their objectives. Managers don't have a clue.

And how well do entrepreneurs manage? (1)

mc6809e (214243) | about 2 years ago | (#42575229)

Perhaps managers need to be more focused to get their job done.

And let's not turn this into an argument about which style of thinking is superior. A thing is superior to another only give a particular goal and context. Some forms of thinking best in one context are deadly in another.

The key to a successful organization is making sure each kind of thinking finds appropriate application in a proper context and that they ultimately work together.

maFre (-1)

Anonymous Coward | about 2 years ago | (#42575237)

Managers can innovate? (2)

gweihir (88907) | about 2 years ago | (#42575241)

News to me. Managers today are bean-counters, controllers, MBAs. They cannot even lead, how would they ever innovate or have any kind of "vision"?

Re:Managers can innovate? (1)

Pulzar (81031) | about 2 years ago | (#42575377)

Managers today are bean-counters, controllers, MBAs.

Maybe they are where you work. There are plenty of companies where that's not true, likely most of the ones with less than 5,000 employees.

Re:Managers can innovate? (0)

Anonymous Coward | about 2 years ago | (#42576219)

Managers today are bean-counters, controllers, MBAs.

Maybe they are where you work. There are plenty of companies where that's not true, likely most of the ones with less than 5,000 employees.

Every manager I have had the displeasure of serving under has been nothing more than a lapdog for corporate policy rather than actually adding any value to the company. In fact, most managers could be fired and nobody would notice except the happy staffers. If you need a nurse-maid in the workplace go back to kindergarten or an elder-care home.

Re:Managers can innovate? (2)

garcia (6573) | about 2 years ago | (#42575499)

I think, depending on the culture of the company in which you work, this is changing rapidly. Out are the static MBA types and in are the knowledgeable leaders who can really drive great decision-making and develop resources.

I have worked for both organizations and seen the damage the "MBA model" (over-generalized but we'll leave it that way for simplicity's sake) has done. I currently work for an organization which turns that model on its head and makes work exciting and interesting rather than stagnant.

Re:Managers can innovate? (1)

Narot23 (2806751) | about 2 years ago | (#42575793)

The question is, why should they? At least in the industry I'm in, managers are not there to have vision or innovate. That's the role that sales fulfills, and executive leadership. Managers are there to ensure that the innovation is feasible (is the "vision" even possible to do in reality?) and profitable. Compensation goes down that same path. The sales force and executive teams take the role of entrepreneurs, and get the biggest rewards. Managers are there to steer the ship, not chart the course. The rewards of that may fall above those who are simply assigned to perform tasks, but it's nowhere near the level of those bringing the new business in the door. Granted, I work in a manufacturing-related industry, so things may be different but a bit "loose" in terms of structure. Management tends to organize the capable employees into groups that can execute the ridiculous specs to which sales staff sell without any concept of technical feasibility or profitability. "Whatever the customer asks for, sell it and let production sort it out". In our industry, managers tend to be skilled & veteran operators - it may be different in others.

Because (1)

Billly Gates (198444) | about 2 years ago | (#42575243)

If you are an entrepreneur and you are not creative ... well you are out of a job FAST. Infact, most entrepeneurs are out of a job fast regardless. You only hear or study about the few successful ones.

A manager is not being paid to be creative. He or she is being paid to babbysit and attend meetings all day. Ok, I am being bashful here, maybe there a few good managers, but not from what I seen. There is a reason why managers get paid less then successful entrepeneurs by a large amount of money. Their ability to bring in money/value is limited to their scope of what they are in charge of.

Entrepeneurs on the other hand change the world for millions of people.

I do not agree with your premise (1)

Anonymous Coward | about 2 years ago | (#42575249)

Most entrepreneurs sink without trace.

Re:I do not agree with your premise (1)

maxwell demon (590494) | about 2 years ago | (#42575923)

If you are developing your first project and it flops, you're toast. If you are developing your tenth project and it flops, the other nine products will probably keep your company running regardless.

Re:I do not agree with your premise (0)

Anonymous Coward | about 2 years ago | (#42576169)

Managers are submarines 100% of time. They don't know how it is like at the surface. They never will.

Less meetings. (1)

dasunt (249686) | about 2 years ago | (#42575275)

Less meetings.

Re:Less meetings. (1)

Anonymous Coward | about 2 years ago | (#42575449)

Fewer meetings.

not surprising (2, Interesting)

Anonymous Coward | about 2 years ago | (#42575341)

In my experience (30 years of R&D/start-ups), it is frequently the case that the entrepreneur is a
technical designer, engineer, sw developer, researcher, etc., while the manager is not. It is not
surprising that the former more frequently innovates than the latter.

In a surprising number of cases, the manager is where s/he is because they were a poor innovator
and rose up into management, while the successful innovator stuck to what they were good at.
I have known some fantastic managers who were also awesome innovators, but they were infrequent
enough that I enjoy working with them when they did occur.

Wait, what? (4, Insightful)

Xugumad (39311) | about 2 years ago | (#42575351)

I don't even understand the question.

Why would managers be innovative? You might as well ask why managers aren't great chefs; that's not what they do.

This sounds to me a little like some of the management worship that's going on these days, where those who work in management presume they're doing an inherently harder job, or simply that they're more skilled than non-management. So far I see little evidence to suggest management is inherently more difficult than any other mentally-focused skilled job.

Re:Wait, what? (1)

kelzer (83087) | about 2 years ago | (#42575407)

I agree with this. In my 25+ years of experience I've found that managers generally have good people skills which help them to delegate and motivate, good planning skills, good organizational skills, etc. They rarely have great analytical ability or creativity.

Re:Wait, what? (4, Interesting)

Xugumad (39311) | about 2 years ago | (#42575541)

I think it dates back to when intellectual work was a lot rarer, and managers tended to be either the only skilled worker, or amongst the most skilled, and things have not really caught up with the fact that now managers are frequently managing workers who are at least as skilled, but in very different ways.

Re:Wait, what? (1)

dkleinsc (563838) | about 2 years ago | (#42575979)

No, now we're dealing with entrepreneur worship, the belief that everything that happens that's awesome anywhere is the result of some entrepreneur trying to make money, and that all entrepreneurs are successful. The particular image that's making the business press go gaga is that of the college student who drops out of school to start a business and makes a ton of cash due to hard work and a great idea.

Of course, what actually happens is that a very tiny minority of entrepreneurs are ridiculously successful and become the darlings of Wall Street, a bunch are moderately successful and create profitable businesses, and the vast majority are complete and utter failures.

+1 (0)

Anonymous Coward | about 2 years ago | (#42577303)

This is some sort of ego stroking for business people.

Re:Wait, what? (1)

WhiplashII (542766) | about 2 years ago | (#42577405)

and the vast majority are complete and utter failures.

I would add to this, though - they may have failed, but they likely learned something that will permanently increase their value to society. And, because of that, permanently increase their income.

I strongly recommend that all college students try to start a business. Yes, you will likely fail - but you will be exposed to thing that will change your perspective forever.

One hit wonders are easier (0)

Anonymous Coward | about 2 years ago | (#42575353)

Simple, it's much much easier to do something amazing once then it is to do it over and over again. A failed entrepreneur means you don't hear about him, a failed manager means the closer of an already established business. Innovation implies something new which in turn implies risk. Therefore, the greater you innovate, you greater risk you expose yourself. Such risks are much easier to deal with when you have less to lose and when it's only over a shorter period of time.

Innovation can revive a company and propel it further but there are good examples when it also have bite them just as much. If it takes 3 failed entrepreneur (different products) for 1 to succeed, can a single company handle 3 failed products for 1 to make it big? It's only logical already established business take less risk in general.

Really, the two are standing on different views, one already in an established market, one much break into a market where alternatives may already exists (requiring innovation to give them the edge to succeed).

Answer is in the Name (1)

wisnoskij (1206448) | about 2 years ago | (#42575403)

Managers manage. They are hired to manage a company/group/project, not to create a new company/group/project. Also if someone calls themselves a manager, they are psychologically predisposing themselves to managing, not creating.
While the word Entrepreneurs evokes creating and innovating.

In the same way if you hired a Software Engineer you will get different results on the same tasks as if you hired a Programmer. Both because different people will apply and you will likely will have a differently worked list is responsibilities, but also just because of the differences in the title.

For the same reason (0)

Anonymous Coward | about 2 years ago | (#42575447)

that a self-taught electronics enthusiast is better than a school-created engineer. You can't create what isn't there just by going to a building with expensive textbooks in it.

Re:For the same reason (1)

maxwell demon (590494) | about 2 years ago | (#42575969)

Except that there's the chance that the self-taught electronics enthusiast builds systems which work fine under normal conditions, but fail under extreme conditions. I'd not want to drive in a car whose electronics is built by a self-taught electronics enthusiast.

Not An Answer (0)

Anonymous Coward | about 2 years ago | (#42575493)

The article doesn't answer the question. It answer how entrepreneurs innovate better, not why.

ObBetteridge (0)

Anonymous Coward | about 2 years ago | (#42575503)


HUH? (1)

CPNABEND (742114) | about 2 years ago | (#42575517)

This is a trick question, right?

Having seen creative managers, and logical ones (1)

Njovich (553857) | about 2 years ago | (#42575535)

Having seen creative managers, and logical managers, I'd take the logical ones any day. For an entrepreneur (or otherwise leader) you expect them to come up with a bold vision and creativity.

IMHO a good manager shouldn't do those things too much and rather use those skills from their team and organization. Not because a manager can't, but because if he gets involved with his own ideas too much, it clouds judgement.

Managers are not leaders (1)

houghi (78078) | about 2 years ago | (#42575555)

Simple as that. Managers manage. Entrepreneurs are leaders. They lead. When you manage something, you basically want things as they are. When you lead, you want things as YOU like them to be.

Managers are often lousy leaders and leaders are often lousy managers.

Exceptions do exist.

Re:Managers are not leaders (1)

PPH (736903) | about 2 years ago | (#42575825)

Right. But this won't go down well at organizations with hierarchical, top down management styles. Managers must lead. If you have someone down lower on the company org chart, their job is to shut up and follow orders.

I found it particularly disturbing that the photo caption reads "New MIT research may explain why you need to work Saturday?" Typical management thinking. We'll just mandate overtime and get 20% more innovation out of the grunts.

Defeat is built into the system (4, Insightful)

gestalt_n_pepper (991155) | about 2 years ago | (#42575561)

In a large corporation, perfectly daft decisions get made daily as managers try and jockey for position and cover their asses. Actual innovative work comes fourth or fifth level down in priority, and is only done when absolutely necessary with a mandate from above.

And so, IT resources are scattered across the globe, rather than in the building. Purchasing $100.01 worth of cables goes through a three week approval process. Mission critical departments and server assets are suddenly "orphaned" with no single point of authority. Witless HR drones write job requirements that ask for "5 years experience in Windows 8 App programming." The managers who implement these changes get their bonus for cost savings, and then are gone in a year, never having to live with the consequences.

So what's the point in having a good idea, or being innovative in those circumstances when anything that doesn't server the political purposes of a manager gets quashed even before it's started?

An entrepreneur, in contrast, tells the IT person to go down to Best Buy and pick up the cables and give the bill to accounting and let them sort it out, the servers are attended to. Employees are selected for real skills by people who can reason and think and bonuses get linked to real improvements and productivity, not just what can be described in a bean counter's spreadsheet. The entrepreneur has to really perform. All a manager has to do is stay in place.

Executive Assistants (1)

bussdriver (620565) | about 2 years ago | (#42575715)

The best secretaries and exec assistants are not employed to help a manager do their job-- and their job as parent stated, is NOT to innovate or make waves but to climb the corporate ladder - and naturally, proper procedures must be followed because their jobs have largely turned into enforcers of foolish policy bloat. If you've seen top secretaries and exec assistants at work you should realize they do a bulk of the actual work.

Also, Execs can more easily take credit for the work and ideas of others than a manager. The Entrepreneurs get ideas and prototypes from the whole team they just have to pick and choose from the best position to get many ideas; maybe even combine things from multiple sources in some obvious way (that is, obvious if given their perspective of the situation.)

No Incentive to Innovate on the Management Side... (1)

dryriver (1010635) | about 2 years ago | (#42575581)

A manager does not have to innovate very often - a so-called "cash cow product" may do fine in the market, and remain a profitable sell for years, without anything substantial being changed about the product. If and when something needs to be changed - when the product is about to enter the decline phase of its lifecycle - there are people you can hire with cash, whose job it is to figure out any changes/improvements to the product. The manager will not do this work personally - he/she will delegate the task to people trained to perform just that function. The most a manager will do is to apply some common sense thinking as to whether the "new product" is going to be a big seller or not. ---- Your average entrepreneur on the other hand has to develop an idea from absolute infancy to marketable maturity. That takes a lot of brainpower, and especially so if there is little or no money at the inception for specialists to be hired with. In many cases, the entrepreneur will perform 3, 4, 5 different roles in the development of the product. Inventor. Prototyper. Tester. Strategist. Of course doing all that stuff yourself will keep both of your brain lobes busy. Unlike the manager, there is nobody to delegate vital tasks to, and you have to wear many hats at the same time. The manager, on the other hand, has many people he/she can delegate vital tasks to. He/she merely has to pick the right people and assign them the right tasks to get a good result. With the entrepreneur, a lot will fail or succeed based on how well the entrepreneur handles multiple active roles without failing in one or more of them. Thus the entrepreneur has a higher and more diverse cognitive load than the manager. That makes sense, doesn't it?

George Bernard Shaw (3, Insightful)

PPH (736903) | about 2 years ago | (#42575611)

"The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man."

With 63 subjects it must be accurate! (0)

Anonymous Coward | about 2 years ago | (#42575627)

OMG! They pick 63 people and run this nonsense experiment and everyone trots out their own biases regarding 'managers' versus 'entrepeneurs'.


Re:With 63 subjects it must be accurate! (1)

PPH (736903) | about 2 years ago | (#42575853)

That's how probability works. Uncertainty is related to the absolute random sample size. Not to its relationship to the overall population.

Innovating better is assumption of article (1)

sleepypsycho (1335401) | about 2 years ago | (#42575767)

It is the article and the post that says that entrepreneurs innovate better. They are referencing "common knowledge". Based on later quotes in the article the research does not appear to make any such claim. The research just seems to be that they are creating more emotionally. Whether this is an advantage in anyway is an open question. Certainly you can hardly be impressed by innovation of the "snuggie". It is possible that thinking emotionally and artistically might allow an entrepreneur to think further outside the box. If so, then there could be a wider range of quality from entrepreneurs, and thus some of the biggest innovations. However, I tend to believe the common knowledge is because of how memorably and notable it is when an entrepreneur becomes success with a new product. When companies started producing a new products, such as USB thumb drives or whatever you might think of, it tends to be considered more of an inevitable or natural progression than as innovative. Perhaps there is a feeling that a group can't be innovative and that managers do not come up with ideas, and rather idea are formed by the group. Perhaps the entrepreneur is noteworthy because he is the exception and manages to forge a company against long odds. Maybe it is just because he makes a big deal of himself. I am sure sometime the common knowledge comes from ideas that companies rejected but went on to be successful.

Now Please.... (0)

Anonymous Coward | about 2 years ago | (#42575775)

...Do the same tests on Chinese vs American scientists when they develop hypothesis and make plans/estimations for future experiments....

That may be very revealing. People in science widely acknowledge that the Chinese training form creates diligent uninspired thinking that focuses on large experiments making small jumps in progress, and that American scientists are more creative and less methodical, doing smaller experiments that make larger jumps.

This is a generalization. Not an absolute.

Re:Now Please.... (1)

maxwell demon (590494) | about 2 years ago | (#42575863)

...Do the same tests on Chinese vs American scientists when they develop hypothesis and make plans/estimations for future experiments....

That may be very revealing. People in science widely acknowledge that the Chinese training form creates diligent uninspired thinking that focuses on large experiments making small jumps in progress, and that American scientists are more creative and less methodical, doing smaller experiments that make larger jumps.

This is a generalization. Not an absolute.

Since most "American" scientists are really scientists from all over the world working in America, I'd say it's not so much a question of the type of training (which many of those have gotten elsewhere), as it is a question of the type of working conditions. There are few fields where freedom is as important for good results as in science.

I am an innovative manager. (5, Interesting)

kmitchner (2765231) | about 2 years ago | (#42575787)

I consider myself to be an innovative manager. I have great ideas and those ideas have a lot of times in the past made the companies I've worked for a ton of money. This happens all the time and I don't think you understand the real problem. The problem isn't that managers aren't innovative, it's that managers don't get anything for their innovations. As an innovative manager I run into a lot of obstacles in my career. First and foremost I have never received even close to 1% of the profits from any invention I have ever came up with for an employer. At my last job all I did was come up with new ideas to make the company money. I have made companies millions of dollars in profits with my ideas. I have implemented ideas that have saved hundreds of thousands per month in running costs. Afterwards I did not get a single raise, bonus or sometimes even acknowledgement of that extra income. It was my job, they were already paying me for it. As a sub 6 figure "senior" employee I feel a huge push to not mention my ideas to my employers. If the idea costs money to implement, it usually gets shut down before they even think about it, because most people aren't willing to put their own money on the line for a risky idea they didn't come up with. When it only costs a little money, or even a free of cost change in procedures that could cut costs by dramatic amounts, employees are usually thanked and forgotten, if they are even thanked. Decades ago if an employee came up with a method to save a company $300,000 a month that employee would be pushed to the top of a company and probably even made a junior partner and queried for new ideas, not today. So what do innovative managers do now? We look carefully at our non-compete agreements and we focus our innovative brains in a direction that does not conflict with it. We do our job as well as we can, but the second we leave the building our brains are thinking about our own inventions, our own companies and how we can get them funded. And once we get the cash to start something, we leave, we become entrepreneurs and we break the logic of this topic. The only difference between an "Entrepreneur" and a "Manager" is that the entrepreneur quit his day job as a manager to focus on his own idea. So what do I do now? Well

Because we're NOT Control Freaks (0)

Anonymous Coward | about 2 years ago | (#42575885)

Because we're NOT Control Freaks, simple as that.

Nothing to do with the post, all to do with person (0)

Anonymous Coward | about 2 years ago | (#42575901)

This is actually kinda silly. Sure someone who is a manager might be more inclined to organize, but really, this is entirely governed by what each person is good at and like doing.

There are techs who are very good at training others and in sales.

It is even possible to have someone working for the RIAA who is a musician, though it's highly doubtful.

Some like boxing in people because it makes it easy, but we all have activities we like and dislike, good or not. Which may very well change.

And the answer to this stupid question is... (2)

EmagGeek (574360) | about 2 years ago | (#42575935)

... entrepreneurs have SKIN IN THE GAME.

That's why.

Who's a Thunk It!? (0)

Anonymous Coward | about 2 years ago | (#42575945)

Those who innovate use the creative side of their brain more than those who don't. Is that a surprise?

Matter of definitions. (0)

Anonymous Coward | about 2 years ago | (#42576041)

We define an entrepreneur as somebody with above a certain level of success as a manager. While a valid question it seems somewhat ill framed. The real question is, "what makes successful managers?" For the answer to be, "people that think about things more," is hardly surprising.

Some people more clever than others (0)

Anonymous Coward | about 2 years ago | (#42576065)

Clever people less likely to end up in highly structured career paths. More news at 5.

simpler than that (1)

Anonymous Coward | about 2 years ago | (#42576367)

entrepreneurs are your vigilante's
manager's are the police

one goes out and seeks justice "from their view"
the other tries follow procedure to the "letter of the law"

that is, entrepreneurs tend not to give a shit about the ramifications til long after they get the result they want

Because MIT is comparing Apples and Oranges (1)

Dcnjoe60 (682885) | about 2 years ago | (#42576435)

MIT's study is flawed. Entrepreneurs aren't better innovators than managers. Successful entrepreneurs may be better innovators, but not entrepreneurs taken as a whole. Since over half of all small businesses fail, if you include those numbers in the base, then entrepreneurs are not more successful.

To succeed, you have to first have an idea. Then you have to be able to capitalize on that idea. Unless you are already very successful, most entrepreneurs have to bring in outside capital which means they also give up some (to a lot) of control of their company, or at least their idea. At that point, they are in the same position as a manager, who has an idea, but not the control of that idea either, because the rest of the organizaiton takes over.

So, either compare successful entrepreneurs to successful managers or compare all entrepreneurs to all managers, but don't mix and match.

source? (1)

mandginguero (1435161) | about 2 years ago | (#42576517)

Has anyone else tried to pull the original source material? I can't find the MIT release, and this paper linked to from the bottom of the networkworld article* doesn't seem to have the information I'm looking for. The skeptic in me wanted to find out 1.) what they chose for 'risk' model behavior - the 4 arm bandit choice between 4 slot machines with different pay out ratios; 2.) how they operationalized risk - 'explorative' behavior was when they chose a different slot machine from the previous trial, and 'exploitative' when they chose the same slot machine as the previous trial; and perhaps most important to me 3.) how they classified a manager vs an entrepreneur. Could not find anything about that in the methods section. A keyword search for 'entrepreneur' returns the first hit in the analysis section when they describe performing a (presumably post-hoc) test on the locus coeruleus in entrepreneurs. No real justification, or qualifications......

Also of concern is that their subject pool was drawn from managerial experience in the diverse fields of "marketing, human resources, production, R&D, or finance." As a scientist, I'm not well versed in the business world, but how similar do y'all think decision making in these fields might be?


Re:source? (1)

mandginguero (1435161) | about 2 years ago | (#42576533)

I should qualify I was also unable to find other papers published by Zollo through that the networkworld post could have sourced.

Because Managers are there to manage, not innovate (1)

YoungManKlaus (2773165) | about 2 years ago | (#42576521)

Simple as that. For innovation you have other people.

You've got it backwards (1)

Loosifur (954968) | about 2 years ago | (#42576607)

People who tend to be drawn towards risk-taking, who have tremendous focus, and who are excellent self-motivators tend to become entrepreneurs. People who are organized (and good at organizing), who have a talent for seeing things at the macro level, and who are good at sort of assembling and handling lots of moving parts tend to become managers of one kind or another.

And in reality, successful entrepreneurs are also good at managing people and resources, just as great managers are creative problem-solvers and aren't afraid to think outside of the box. There are exceptions, of course, but the Bill Lumbergh manager stereotype and the sort of Steve Jobs/Bill Gates obnoxious genius stereotype don't seem to be the rule.

Duuh (1)

frisket (149522) | about 2 years ago | (#42576999)

Why Do Entrepreneurs Innovate Better Than Managers?

Because they are entrepreneurs, not managers, perhaps?

Blood Flow (0)

Anonymous Coward | about 2 years ago | (#42577029)

Many years ago, on the order of magnitude 30, a clinical research paper showed that a necktie critically reduces the blood flow to the brain thus reducing oxygen to the brain. :)

Mischaracterization again! (5, Insightful)

Shavano (2541114) | about 2 years ago | (#42577281)

The article mischaracterizes MIT's research. The original paper did not say that entrepreneurs "innovate better." It said that they used more of their brains. To judge whether they "innovate better" you would have to measure OUTCOMES, which the MIT research did not do.

It's all about incentive. (0)

Anonymous Coward | about 2 years ago | (#42577345)

The main goal of both manager and 'innovator' is keeping your job, and if at all possible, by doing that job well. The 'innovator' does so by 'innovating, the manager does so by managing.

Only the innovator's result of labour has something to do with the actual product or service. Only the manager that understands that his job is also the actual product or service could acutally innovate.

trick question? (0)

Anonymous Coward | about 2 years ago | (#42577523)

Why Do Entrepreneurs Innovate Better Than Managers?

If you don't know the answer to that, you're probably a manager.

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